The Exxon Example for Corporations: The shareholder duty case for leaving states that punish business

by Stephan Kinsella on June 3, 2026

From the War Street Journal: “The Exxon Example for Corporations: The shareholder duty case for leaving states that punish business.” (June 1, 2026).

From my tweet, and a summary from AI since the article is paywalled under threat of fascist copyright law:

brill. this is what is good about federalism and decentralization. of course the left and left-libertarians will hate this https://t.co/7mtuUk1GCU

The Wall Street Journal editorial, The Exxon Example for Corporations, discusses Exxon Mobil’s recent shareholder vote, where 71%…

— Stephan Kinsella (@NSKinsella) June 2, 2026

Gemini Summary:

The Wall Street Journal editorial, The Exxon Example for Corporations, discusses Exxon Mobil’s recent shareholder vote, where 71% of investors supported moving the company’s corporate domicile from New Jersey to Texas. This decision passed despite opposition from proxy advisory firms like Glass Lewis and ISS. CEO Darren Woods argued that Texas officials and citizens possess a greater familiarity with the business, which will foster more predictable and productive regulatory conditions for the company’s long-term operations.

The piece framing this move highlights a growing, sharp policy divergence between states. The authors argue that leaving states with high regulatory burdens is increasingly becoming a matter of corporate governance duty to protect shareholder interests. Key factors driving Exxon’s relocation include:

Litigation Risk Mitigation: Moving shields the company from aggressive progressive litigation, such as New Jersey’s 2022 climate change lawsuit against Exxon. The company also implemented an “exclusive forum provision” to route future shareholder suits through federal courts in southern Texas or the state’s new specialized business courts.

Tax Advantages: New Jersey imposes an 11.5% corporate tax rate and a top personal income tax rate of 10.75%. In contrast, Texas has no personal income tax and no corporate income tax (relying instead on a gross receipts tax).

Lower Operational Costs: Energy costs are significantly lower in Texas, where electricity averages 15.41 cents per kilowatt-hour compared to 23.12 cents in New Jersey. This is largely attributed to Texas’s “all-of-the-above” energy strategy versus New Jersey’s heavier restrictions on fossil fuels.